3 Top TSX Stocks to Buy in June 2020

Buy these top TSX stocks in June 2020. You’ll be rewarded with big dividends and long-term price appreciation potential.

Gold medal

Image source: Getty Images.

Canadian Foolish writers voiced their opinions on the top 15 TSX dividend stocks to buy in June.

Dividend stocks are wonderful, because they pay you to hold the investments. Ultimately, that’s a great way to get periodic returns from investments, because you don’t have to rely on an exit event.

From the top 15 ideas, I handpicked three that I believe are still good values today. Of course, one of them is Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) — the top stock I chose.

Manulife stock

I was very lucky to manage to add to my position in Manulife (TSX:MFC)(NYSE:MFC) stock when it traded at $13 and change per share. Despite the stock reaching for the sky and rising 50% since then, it still trades at a great value. Because I believe there’s room for the dividend stock to run, I still hold the stock.

At about $20 per share at writing, Manulife trades at about 6.8 times last year’s earnings. In 2019, the life and health insurer reported more than $5.2 billion of net income. That’s the kind of earnings power it has in a normal economy.

Assuming Manulife trades at 2019’s year-end multiple again by the end of 2021, the stock should trade close to $27 for about 33% upside potential. Meanwhile, the Canadian Dividend Aristocrat, with a six-year dividend-growth streak, provides a nice yield of 5.6%.

MFC Dividend Yield Chart

MFC Dividend Yield data by YCharts. Manulife stock’s dividend yield history.

Even assuming a pretty conservative yield target of 4.5%, the stock should still trade closer to $25 for 24% upside.

Enbridge stock

Enbridge (TSX:ENB)(NYSE:ENB)stock was another no-brainer buy in the market crash. Despite rallying 32% from a $34 low, the TSX stock is still a good value.

In 2019, the North American energy infrastructure leader generated nearly $9.4 billion of cash flow. That turned out to be $4.65 per share. Interestingly, it’s expected to increase its cash flow per share this year, because volatile energy prices have little impact on the business.

Enbridge stock is a Canadian Dividend Aristocrat with 24 consecutive years of dividend increases. The streak is set to continue. Currently, it offers a generous yield of 7.1%.

ENB Dividend Yield Chart

ENB Dividend Yield data by YCharts. Enbridge stock’s 10-year dividend yield history.

Assuming a normalized yield of about 6%, ENB stock’s fair value should be about $54 per share. This suggests another 20% upside is in the cards.

Brookfield Infrastructure stock

Brookfield Infrastructure appears to be the only one that’s not trading at a discount. However, that doesn’t mean investors should ignore it. According to Warren Buffett, it’s better to buy a wonderful business at a fair value than a fair business at a wonderful value.

Brookfield Infrastructure is a wonderful business. This is reflected in its incredible long-term returns of 23% per year since inception more than 10 years ago.

Its diversified portfolio of quality infrastructure assets is something shareholders should be proud of. They are critical infrastructures for the global economy. The assets include electricity transmission lines, regulated natural gas pipelines, rail operations, toll roads, data centres, and much more.

Management aims for cash distribution increases of 5-9% per year and returns of 12-15% in the long run. So, going forward, it’s more reasonable to expect annualized total returns of about 10% from the dividend stock.

At writing, BIP offers a decent yield of nearly 4.4%.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Kay Ng owns shares of Brookfield Infrastructure Partners, Manulife, and Enbridge. The Motley Fool owns shares of and recommends Enbridge. The Motley Fool recommends BROOKFIELD INFRA PARTNERS LP UNITS and Brookfield Infrastructure Partners.

More on Dividend Stocks

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

Passive Income: 2 Safe Dividend Stocks to Own for the Next 10 Years

Dividend stocks such as Manulife and Fortis can help you generate a stable and recurring passive-income stream.

Read more »

Young woman sat at laptop by a window
Dividend Stocks

3 Dividend Stocks Everyone Should Own for the Long Haul

For investors looking for top-tier dividend stocks to buy and hold for the long term, here are three of my…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Dividend Royalty: 3 Fabulous Stocks to Buy Now for Decades of Passive Income

Rogers Communications stock and Canadian Natural Resources stock could pay you dividends for decades to come.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 Dividend Stocks That Pay Me More Than $54.57 Per Month

These three dividend stocks have done me well over the years, so let's look at how much I've gotten in…

Read more »

Dividend Stocks

The Top Canadian REITs to Buy in April 2024

For growth and dividends this April, look to these two REITs that have quite the promising present as well as…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Dividend Stocks

TFSA Magic: Earn Enormous Passive Income That the CRA Can’t Touch

If you're seeking out passive income, with zero taxes involved, then get on board with a TFSA and this portfolio…

Read more »

Man with no money. Businessman holding empty wallet
Dividend Stocks

2 Stocks Under $50 New Investors Can Confidently Buy

There are some great stocks under $50 that every investor needs to know about. Here’s a look at two great…

Read more »

think thought consider
Dividend Stocks

Down 10.88%: Is ATD Stock a Good Buy After Earnings?

Alimentation Couche-Tard (TSX:ATD) stock might not be the easy buy-case it once was. Here’s a look at what happened.

Read more »